Building Capital

Roiteks™ – Building Capital

Our top priority at Roiteks™ is to be informative and lay the groundwork for traders to get on the path to building capital and trading profitably.

We have created a checklist which highlights the different topics of concern involved in building capital, and which advises traders on the best ways to trade successfully.

Roiteks™ wishes you a lucrative financial future, this can help you get there.

Having A Plan

Having a plan is the most important part of being a trader. It should go without saying that being prepared is always preferable to being unprepared. Especially when dealing with money.

Not having a plan can mean over-trading, trying to reach an unreasonable profit, or going beyond a personal level of acceptable risk. Never in financial trading is it advisable to go in blind, and the more a person understands and plans out their personal goals and limits, the better the chance at being successful, and not ending up in a bad financial situation.

So how can you build a plan that is simple, easy, and safe?

Stick To Your Strategy

The second most important thing is sticking to your strategy.

The most common mistake traders make is switching their strategy mid-way through. If a trader makes a monthly or yearly goal and it doesn’t seem to be going well after a few days or a couple months, it doesn’t mean that the expectation will not be met at the end. It is wise to remember to look at long run results and not to judge on a trade-by-trade basis as this can drive a trader nuts while also leading to erratic trading behavior. The best way to deal with the often unexpected psychological aspects of trading is to have a good plan and to stick to it. If a trader finds themselves in a position in which is seems like their goal is no longer a useful one, it’s best to consult a mentor before making any major changes.

Cope with the psychological aspect of trading

In today’s market it’s easy to get off track quickly and this can unfortunately lead to things like guessing or making an impromptu and undesirable trade. This phenomenon mainly happens when a trader doesn’t know exactly what to do in a specific situation, and it is in these situations that traders tend to make the rookie mistakes that can, and do, lead to a zero account balance. The question becomes how to avoid these mistakes.

First of all, the smartest thing a trader can do when unsure is call their trading mentor to seek advice. Mentors are there to explain exactly what the particular options are at any given time, and to provide different ways to cope with the situation at hand. This procedure is a preventative measure against making hasty mistakes, and helps eliminate the idea of trading based on emotions. Having a mentor is important in these situations and being provided this assistance from our brokerage firm is one of the most important assets that a trader can have access to. It’s always good to hear another opinion, and especially from someone who is experienced in dealing with unexpected market movements and trade outcomes.

Keep in mind that many mistakes are driven by fear, and fear is the worst reason to do almost anything. So don’t let your fears take over, get assistance instead of making hasty and damaging mistakes.

Let’s go over the checklist :

Having A Goal

Having a goal helps traders concentrate their efforts in trading and eliminates some of the mistakes common to beginners.

It’s important to have a yearly goal, but it’s also important to create monthly goals, or something that acts as a shorter term goal. Short term goals are less intimidating and easier to achieve, and give a trader understandable steps to climb in reaching their bigger goal.

Traders, especially newer ones, have the tendency to be unrealistic in what they want to accomplish. Getting input from a mentor on setting reasonable goals is important and aids in keeping realistic expectations.

The alternative of not having a goal, as mentioned before, can have catastrophic results like losing all capital.

Having Capital

Having capital is the most important asset in trading, since without capital there is no trading. It’s important to invest whatever is possible, while never investing more than can be afforded. For example, using mortgage or rent money to invest is a bad idea.

Since trading is done for the long term results, positive results might not be visible in the short term, and this is okay. Trading requires patience, and not rushing into bad financial decisions like investing money meant for other purposes in life, just to see a quick result. However, if there is capital just sitting around in your account unused and with no purpose, it would be wise to use it as investment money from which a profit can be made, rather than having it sit there not creating income.

The more funds you have for your trading capital, the safer trading becomes. If you find yourself in a situation where a certain position goes against you, there are some smart steps you can take in order to minimize your loss or potentially turn it into a profit by using your existing capital. However, if you make the wrong decisions and find yourself left with no capital, there would be no ability to take any action and the loss would be irreversible in this scenario.

Know your account features

Knowing the different options that are available to you through your account gives you more power. In many cases, not knowing exactly what you’re able to do leads to mistakes or missed opportunities. In the world of trading, mistakes and missed opportunities can be costly. One of the ways to avoid these missteps is to consult your trading mentor. They can explain how to use each and every feature the platform offers in the most efficient way. This way you’ll be able to avoid unnecessary mistakes. A good idea is also to view the available videos on the site by yourself. They provide integral information for understanding trading and technique.

Fundamental analysis

When applied to CFD’s, fundamental analysis is performed on financial announcements put out by both countries and companies on a monthly, quarterly, and yearly basis. This applies to historical and present data, with the goal of making financial forecasts.

We use fundamental analysis to evaluate if a trade is likely to be good or bad. When an asset goes up and down it creates opportunity to profit, and knowing which way it’s heading is important in making the correct trade.

Fundamental analysis focuses on the overall state of the economy including: economic analysis, industry analysis, and company analysis. Within these bigger parameters are other considerations including interest rates, production, earnings, employment, GDP, housing, manufacturing, and management. There are two basic approaches one can use for fundamental analysis: macro analysis and micro analysis.

It’s best to start with macro analysis and move forward to micro analysis.

Macro analysis indicators include: GDP growth rates, inflation, interest rates, exchange rates, productivity, and energy prices. These factors give an overview of an entire economic situation. Decisions can be based solely on these indicators at times.

Micro analysis indicators include: quarterly reports, annual reports, and press releases. Digging into these statements gives an in depth view of what is going on in different industries including total sales for companies, price levels, the effects of competing products, and foreign competition. This information can be used to narrow a search in order to make the best trade.

Technical analysis

The term technical analysis refers to using mathematical formulas or moving averages on the chart patterns of different assets in order to make determinations about future movements.

Though it can seem daunting to master such concepts, they become easier with practice and provide a useful tool in identifying good trades.

For those who don’t like to spend hours analyzing charts and trying to understand which way the market is heading, we provide expert analysts who are well versed in understanding market information and can provide guidance as to which assets hold the highest probability for movement in a given direction. In order to have a very high accuracy rate, technical and fundamental analyses should be employed together for each and every investment made. Here at Roiteks™ each trader will receive a trading mentor that has the experience and knowledge to perform these analyses.

This kind of assistance will help you see results on your trading portfolio much faster.

Trading strategy

In finance, a trading strategy is a plan that is designed to achieve the highest level of profitability possible.

In today’s financial market, there are always a lot of different and new trading strategies. The main reason for this is that each person has different goals and experiences and the trading strategy employed reflects this. Please consult with your mentor on which strategy is the right one for you. Most of them will have to be modified for your specific needs.

A trading strategy should include how much to trade per position, which markets to trade in, how many trades to make on a daily/weekly/monthly/yearly basis, etc. A trading strategy is a crucial part of trading which most traders completely neglect, and this neglect is one of the main reasons traders end up feeling lost or disappointed. It can’t be emphasized enough the importance of these plans for productive trading.

The main factors of a trading strategy to consider in achieving goals are its validity, determinability, steadiness, and impartiality.

Money Management

Money management refers to the amount of risk a trader should take on when it’s unclear which direction the market is heading. In other words, what amount of the trader’s capital should be invested in order to maximize the trader’s profitability with the minimal amount of risk.

Money management is a vital method used in trading to reach a high risk/reward ratio. It allows for more control over transactions, and involves understanding how to determine the usage of different amounts of money for different trades rather than using the same amount for every trade.

Money management is a way of making effective choices which lead to long-term portfolio earnings.

Time Management

Time management is very important. Just like it’s important to not invest all your money, it’s also important to not invest all your time.

Burning out is very easy to do, and by neglecting families, hobbies, friends and other aspects of life, a trader can fall into a hole where emotions take over and bad decisions are made. Mistakes are often the result of traders who push themselves to the limit, and this happens by trying to accomplish too much at once and not being in control. Managing time effectively is a way of keeping control in general, and control is important in making intelligent trades.

Profits are made from smart trading, not from constant trading. When a person starts trading constantly they are much more open to making bad decisions. Managing trading time and maximizing the time allotted appropriately is a much better way to make progress in the trading world.

When to Withdraw

In order to maintain a strong trading portfolio, all the things that can weaken it should be avoided. One of the most common ways to harm a trading portfolio is by withdrawing funds at the wrong time.

Since withdrawing funds from a portfolio decreases capital, it has a direct effect on trading strategy and money management. While in the process of building capital, a bottom level amount should be decided on that should not be withdrawn under.

For example, let’s say a trader invests 10K, with the goal of reaching a profit of 5K a month. It’s going to take time to reach the amount of capital necessary for this without caving to a higher level of risk than desired. Therefore, the correct way to go about it would mean first reaching the capital sum which would facilitate the desired profit amount in accordance with the desired level of risk, and then withdrawing. In order to accomplish this goal is would mean not withdrawing until reaching above 60K, and then only withdrawing the 5K goal amount at a time.

In Conclusion

Building capital can be very fun and rewarding if done the right way. By taking into consideration all the different aspects of trading and the factors that can affect them, the chances of reaching personal financial goals will be much higher.

Important Risk Disclosure: Remember that trading on financial markets, such as forex, stock, derivative and commodities
exchanges, carries a high level of risk and is not suitable for all investors. When using a leverage, there is a possibility
of losing funds, exceeding your initial investment. Therefore, you should not risk more than you can afford to lose. Before
deciding to trade, you should be fully aware of your exposure to risk. If you do not fully understand and acknowledge the
above, you should seek the advice of independent consultants.

Notice:
It is against the law to solicit U.S. persons to buy and sell commodity options, even if they are called ‘prediction’ contracts,
unless they are listed for trading and traded on a CFTC-registered exchange or unless legally exempt.